Vardhman Textiles (502986) Q2 25/26 earnings summary

Executive summary

• Q2 FY2026 sales were INR 2,468 crore, stable compared to INR 2,565 crore last year, with EBITDA margin at 15.5% despite higher operating costs and global headwinds such as elevated U.S. tariffs and surplus spinning capacity.

• India's largest vertically integrated textile manufacturer, operating in 75+ countries with over 25,000 employees and a turnover above USD 1 billion.

• Focus on sustainability, aiming for net zero emissions by 2045 and significant reductions in waste and freshwater use by 2030.

• Strategic mitigation includes diversification, innovation, customer engagement, partnerships, and operational agility, helping maintain robust performance in yarn and fabric segments.

• Standalone and consolidated unaudited financial results for the quarter and half year ended September 30, 2025, were reviewed and approved by the Board and subjected to limited review by auditors.

Financial highlights

• Q2 FY26 revenue from operations at ₹2,417 crore (standalone), down 2% year-over-year, with EBITDA at ₹383 crore and margin at 15.5%.

• PAT for Q2 FY26 at ₹189 crore (standalone), down 14% year-over-year; PAT margin at 7.7%.

• Consolidated revenue for Q2 FY26 was ₹2,480.10 crore, with net profit at ₹187.76 crore.

• EPS for Q2 FY26 at ₹6.55 (standalone) and ₹6.57 (consolidated).

• H1 FY26 revenue at ₹4,760 crore (standalone), up 1% year-over-year; PAT at ₹391 crore.

Outlook and guidance

• Management expects normalization of spreads by Q4 FY2026, contingent on U.S. trade deals and continued duty-free cotton imports.

• Ongoing capex projects include yarn and fabric capacity expansions, with major completions expected by H2 FY26; green capex initiatives underway, targeting completion by FY27.

• The company is closely monitoring US tariff developments on textiles, with limited direct exposure but ongoing engagement with affected customers; current financial impact is not material.

• UK FTA is in place, with EU FTA showing positive signs; meaningful traction expected in the next financial year.

• Anticipates some impact in Q3 and Q4 due to export seasonality and ongoing market disruptions.